Source - PRN

BlackRock Latin American Investment Trust plc

Half Yearly Financial Results Announcement for Period Ended 30 June 2016

PERFORMANCE RECORD

Financial Highlights

Attributable to ordinary shareholders  As at 
30 June 
2016 
(unaudited) 
As at 
31 December 
2015 
(audited) 


Change 
Assets
Net assets (US$’000) 219,947  180,943  +21.6 
Net asset value per ordinary share (US$ cents) 558.67c  459.60c  +21.6 
– with income reinvested +23.0 
Ordinary share price (mid-market)† (US$ cents) 480.54c  408.24c  +17.7 
– with income reinvested +19.3 
Ordinary share price (mid-market) (pence) 359.50p  277.00p  +29.8 
– with income reinvested +31.6 

   

For the 
six months ended 
30 June 2016 
(unaudited) 
For the 
six months ended 
30 June 2015 
(unaudited) 


Change 
Revenue
Net revenue after taxation (US$’000) 3,876  5,301  -26.9 
Revenue return per ordinary share 9.85c  13.46c  -26.8 
Interim dividend per ordinary share 6.00c  15.00c  -60.0 


Source: BlackRock.

† Based on an exchange rate of 1.3367 as at 30 June 2016 (31 December 2015: 1.4738).

CHAIRMAN'S STATEMENT
for the six months ended 30 June 2016

OVERVIEW AND PERFORMANCE

Following sustained weakness in recent years, it is encouraging to be able to report strong returns for Latin American markets in the first six months of 2016, with positive local market returns also enhanced in most instances by recovering currencies.

By contrast, in other regions the first six months have been challenging, with high levels of volatility; initially following investor concerns over slowing growth in China and latterly by worries about the sustainability of US economic growth and the decision by the UK electorate to leave the European Union.

The motor behind the recovery was the Brazilian market, which reacted positively to the impeachment of President Rousseff, with Brazil’s currency and equity markets responding enthusiastically to the prospect of political change. Mexico’s domestic economy remained relatively resilient but the country has been impacted by events in the US, including concerns over slowing growth and the outcome of the forthcoming presidential elections in November. Consequently, Mexico’s currency was amongst the weakest performers in the region.

In the Andean region, Peru benefitted from the outcome of the presidential elections and the announcement that the market would not be reclassified to Frontier Market status by MSCI; the country ended the period as the best performer in equity market terms in Latin America. Colombia and Chile both benefitted from the improvement in commodities prices. Elsewhere, Argentina is continuing with the normalisation of its economy following the election of President Macri.

Against this background, the MSCI EM Latin America Index ended the period up by 25.7% in US dollar terms (38.6% in sterling terms). By comparison the Company’s net asset value per share (NAV) increased by 23.0% in US dollar terms (35.6% in sterling terms) and the share price increased by 19.3% in US dollar terms (31.6% in sterling terms). (All percentages calculated with income reinvested.)

Since 30 June 2016 and up until close of business on 7 September 2016, the Company’s NAV has increased by 10.4% in sterling terms and by 10.2% in US dollar terms. The share price has increased by 10.7% in sterling terms and by 10.5% in US dollar terms (all percentages calculated with income reinvested).

EARNINGS AND DIVIDENDS

The revenue return per share for the period amounted to 9.85 cents (2015: 13.46 cents). The Board is pleased to declare an interim dividend of 6.00 cents per share (2015: interim dividend of 15.00 cents per share), which will be paid on 28 October 2016 to shareholders on the register as at 23 September 2016 (ex-dividend date of 22 September 2016).

DISCOUNT CONTROL

The next tender offer for 24.99% of the ordinary shares in issue (excluding treasury shares) will be implemented in 2018 if:

  • the continuation vote in 2018 is approved by shareholders;

  • the Company has underperformed the benchmark index on a cumulative US dollar total return basis by more than 1% per annum over the previous two financial years; and

  • the discount to the cum income NAV has on average exceeded 5% over the same two year period.

The Directors continue to monitor the discount at which the ordinary shares trade to their prevailing NAV and in the six months to 30 June 2016 the cum-income discount on the ordinary shares in sterling terms has averaged 12.9% and ranged between 8.0% and 18.1%.

INVESTMENT MANAGEMENT FEE

Following discussions with the Manager, agreement has been reached on a revised management fee basis. The management fee will be reduced with effect from 1 January 2017 from 0.85% per annum to 0.80% per annum of the Company’s net asset value. In addition, the performance fee will be removed.

DIRECTORATE

As I shall be retiring from the Board before the Company’s 2016 annual results are announced, the Board is delighted to announce that Carolan Dobson has agreed to take over as Chairman with effect from 2 March 2017. In addition, Michael St Aldwyn, who has served on the Board since 1996, will be retiring as a Director on 2 March 2017. Micky’s extensive knowledge of the region has been enormously valuable to us over many years and he will be greatly missed. Appointment of a new Director will be announced in due course.

OUTLOOK

Although the economic outlook for much of the region remains challenging, there is considerable scope for political reform, albeit that effecting meaningful change will not be straightforward. Unlike much of the developed world, where central banks appear to be running out of policy options in the event that growth falters, real interest rates in many of the regions’ economies remain high, and falling real interest rates and associated declines in equity risk premiums may well provide the impetus for further progress in equity markets, even if economic growth remains lacklustre. In addition, although commodity prices are unlikely, in the near term, to reach the levels achieved in 2014, it appears that most have at least now stabilised: this will provide a more stable environment for planning investment and forecasting future revenues.

Peter Burnell
Chairman

9 September 2016

INTERIM MANAGEMENT REPORT AND RESPONSIBILITY STATEMENT

The Chairman’s Statement and the Investment Manager’s Report give details of the events which have occurred during the period and their impact on the financial statements.

PRINCIPAL RISKS AND UNCERTAINTIES

The principal risks faced by the Company can be divided into various areas as follows:

  • Counterparty;

  • Investment performance;

  • Income/dividend;

  • Regulatory;

  • Operational;

  • Market;

  • Financial; and

  • Marketing.

The Board reported on the principal risks and uncertainties faced by the Company in the Annual Report and Financial Statements for the year ended 31 December 2015. A detailed explanation can be found on pages 10 to 13 of the Annual Report and Financial Statements which are available on the website at blackrock.co.uk/brla.

In the view of the Board, there have not been any changes to the fundamental nature of the principal risks and uncertainties since the previous report and these are equally applicable to the remaining six months of the financial year as they were to the six months under review.

GOING CONCERN

The Directors are satisfied that the Company has adequate resources to continue in operational existence for the foreseeable future and is financially sound. For this reason they continue to adopt the going concern basis in preparing the financial statements. The Company has a portfolio of investments which is considered to be readily realisable and is able to meet all of its liabilities from its assets and income generated from these assets. Ongoing charges (excluding finance costs and taxation) for the year ended 31 December 2015 were approximately 1.1% of net assets.

RELATED PARTY DISCLOSURE AND TRANSACTIONS WITH THE INVESTMENT MANAGER

BlackRock Fund Managers Limited (BFM) was appointed as the Company’s Alternative Investment Fund Manager (AIFM) with effect from 2 July 2014. BFM has (with the Company’s consent) delegated certain portfolio and risk management services, and other ancillary services, to BlackRock Investment Management (UK) Limited (BIM UK)). Both BFM and BIM (UK) are regarded as related parties under the Listing Rules. Details of the management and performance fees payable are set out in note 3 and note 10.

The related party transactions with the Directors are set out in note 11.

DIRECTORS’ RESPONSIBILITY STATEMENT

The Disclosure and Transparency Rules (DTR) of the UK Listing Authority require the Directors to confirm their responsibilities in relation to the preparation and publication of the Interim Management Report and Financial Statements.

The Directors confirm to the best of their knowledge and belief that:

  • the condensed set of financial statements contained within the half yearly financial report has been prepared in accordance with applicable UK Accounting Standard FRS 104 ‘Interim Financial Reporting’; and

  • the Interim Management Report, together with the Chairman’s Statement and the Investment Manager’s Report, include a fair review of the information required by 4.2.7R and 4.2.8R of the FCA’s Disclosure and Transparency Rules.

The half yearly financial report has not been audited or reviewed by the Company’s Auditors.

The half yearly financial report was approved by the Board on 9 September 2016 and the above responsibility statement was signed on its behalf by the Chairman.

Peter Burnell
For and on behalf of the Board

9 September 2016

INVESTMENT MANAGER'S REPORT

MARKET OVERVIEW

The first half of 2016 was once again marked by high levels of volatility across global equity markets. Latin American equities struggled at the start of the year, although there was a stabilisation in currencies and the beginning of a recovery in commodity prices during February. The second quarter was driven by positive news flow in Brazil and Peru, changes in interest rate expectations by the US Federal Reserve (the ‘Fed’) and the Brexit vote. In Brazil, the market was driven by the continuation of President Rousseff’s impeachment process and a change in economic direction by the interim administration. In Peru, the market friendly outcome of the Peruvian presidential election and the announcement from MSCI that Peru will not be reclassified to Frontier Market status propelled that market higher. Elsewhere in the region, Argentina continued to make progress on its reform agenda. The Fed’s more dovish tone early in the quarter benefitted emerging markets; however, a more hawkish stance in May saw emerging markets reverse course. After weak payroll figures in June, the Fed once again appeared more dovish, which was supportive for emerging market currencies. Despite the short term volatility created by the Brexit vote, the overall impact on Latin America was short-lived as the market recovered quickly.

Brazil has been one of the top performing equity markets globally so far in 2016, returning over 44% in US dollar terms in the first six months on the back of change in political direction in Brazil following the removal of President Rousseff pending the completion of the impeachment process. The Brazilian real gained 23% and is the top performing currency in the region. The Brazilian Central Bank has been on hold with regard to interest rates, which remain at 14.25%, their highest level in almost a decade. Inflation has moved back to single digits and the potential for interest rate cuts under the new administration is expected but not likely to take place until later in the year.

After being one of the strongest performers in 2015, Mexico has been a laggard returning 0.1% in US dollar terms in the first half of 2016. The currency has been one of the worst performers in the region, depreciating by 5.9% against the US dollar over the same period (the Argentine peso is the only other major regional currency that depreciated in the first half of the year at 14.5%). Despite the challenging start to the year, Mexico’s domestic economy continued to post relatively strong levels of activity.

Most Andean countries have been impacted by the swings in commodity prices this year. Chile and Peru have a higher exposure to, and fiscal dependency on, copper prices, while Colombia’s exposure is more centered on oil prices. Peru has been the best performing equity market in the region so far in the six months to 30 June 2016 returning over 48% while Colombia has returned 24.7% and Chile 13%. Peru has benefitted from the positive outcome of its presidential election which saw market friendly candidate Pedro Pablo Kuczynski win in the second round in June.

PERFORMANCE FIGURES
Six months to 30 June 2016



Regions/indices 
MSCI 
indices 
% change 
Local 
currency 
(% vs. USD) 
Local 
indices 
% change 
Brazil 44.3  23.3  18.9 (Ibovespa)
Chile 13.0  6.8  8.7 (IGPA)
Colombia 24.7  8.7  14.2 (IGBC)
Mexico 0.1  -5.9  7.0 (IPC)
Peru 48.5  3.8  40.7 (S&P/BVL)
MSCI EM Latin America 24.0  CRB Index  10.1 
MSCI Emerging Asia 1.0   Oil (WTI) 30.5 
MSCI Emerging Markets 5.0   Gold  24.6 
MSCI World -0.6  Copper  2.9 
S&P 500 2.7  Corn  0.0 
MSCI Europe -7.6  Soybeans  34.9 

Sources: Bloomberg and BlackRock (all figures in US dollar terms and on a capital only basis).

PERFORMANCE REVIEW

During the first half of 2016, the Company posted a 23.0% increase in its NAV in US dollar terms (equivalent to 35.6% in sterling terms). This return trailed the 25.7% return in the MSCI EM Latin America Index over the same time period in US dollar terms (equivalent to 38.6% in sterling terms).

The primary detractor from performance was stock selection in Brazil. In addition, cash, which averaged 4.8%, weighed on returns. The Company also suffered from an overweight position in Mexico, but the impact was somewhat offset by stock selection. The largest individual detractor from performance was Brazilian pulp & paper stock, Fibria which suffered as a result of weakness in pulp prices so far this year. An underweight position in Vale, which we did not own before April, weighed on returns as the stock benefitted from an improvement in iron ore prices.

Positive contributions to performance stemmed primarily from an underweight position to Chile, which has been a relative underperformer so far this year. Performance was helped by overweight positions and stock selection in Peru. Stock selection in Mexico and our option overwriting strategy also added to performance. An underweight position in Mexican telecoms company, America Movil, was the largest individual contributor to performance as the stock suffered as a result of ongoing competitive pressures, especially in Mexico and Brazil, and post the Brexit vote given its exposure to Europe. Brazilian rail operator, Rumo, added to returns as the market reacted positively to its debt restructuring and capital increase.

Top 5 positive contributors  Bottom 5 negative contributors 
Underweight - America Movil (Telecommunications) 1.0%  Overweight – Fibria (Materials) -1.5% 
Overweight – Rumo (Industrials) 0.7%  Underweight – Vale (Materials) -1.0% 
Not held - Embraer (Industrials) 0.7%  Underweight – Petrobrás (Energy) -0.8% 
Overweight – Buenaventura (Materials) 0.6%  Overweight – Klabin (Materials) -0.5% 
Overweight - BB Seguridade Participaçóes (Financials) 0.4%  Underweight - Banco do Brasil (Financials) -0.5% 
Source: BlackRock

PORTFOLIO

As at 30 June 2016 we held over 56% of total investments in Brazil, which is more than 10% higher than we had at the start of the year. At the sector level, relative to the benchmark, we maintained overweight positions in select banks, beverages, credit card acquirers, infrastructure and telecoms. These were funded by underweights to utilities and metals & mining. The most notable change in Brazil so far this year has been to reduce our underweight position in oil & gas by moving to a neutral position via Petrobrás. In addition, we added to banks. These moves were a way to increase the sensitivity of the portfolio to market moves overall as we looked to benefit from the dramatically changing political situation in Brazil as impeachment proceedings began against President Rousseff. We also added to beverages via Ambev. We have recently reduced our exposure to metals & mining due to concerns regarding the direction of iron ore prices in the second half of the year.

In Mexico, we reduced our weighting in the country from 42% of total investments at the start of the year to 31% at the end of June as we used the proceeds from sales in Mexico as a source of funds to build our position in Brazil. At the sector level we favoured property/fibras(1), and beverages while being underweight wireless telecoms, household products and media. We remain positive about the banking sector in Mexico as loan growth continues to expand as a result of ongoing improvements in the domestic economy. As mentioned previously we have reduced our exposure to commodities, including our position in Cemex.

In the Andean region, we increased our exposure to Credicorp in Peru following the first round of presidential elections, which saw two market friendly candidates move into the second round. Exposures to Chile and Colombia have been fairly stable over the first half of the year.

We increased our exposure to off-benchmark Argentina, specifically in the energy sector, given the success of the reform agenda by President Macri in his first year.

OUTLOOK

The portfolio currently has overweight positions in Peru, Mexico and Brazil and underweight positions in Chile and Colombia. We continue with our more constructive view on Latin America developed over the past few months. We enter the second half of 2016 with a positive view on Brazil and concerns regarding Mexico. In Brazil, the completion of the impeachment process allows the new administration under President Michel Temer to tackle the issues required to get Brazil back on a sustainable growth track. For the first time in several years Brazil has the opportunity to have a clear path to growth; for a return to fiscal discipline and for monetary discipline. The historical government changes in Brazil are opening up the opportunity of improving fiscal numbers over the next two years. This should have a positive impact on investor confidence and eventually lead to a pick up in investment activity in the country. The potential economic recovery in Brazil could trigger powerful earnings revisions.

The Mexican domestic economy has proven to be fairly resilient, however the economy’s close ties to the US could become more of a headwind as growth falters in the US and election day approaches.

In the Andean region, we expect the outcome of the recent Peruvian presidential election to usher in another move to the centre-right in the region and spur another round of investment in that country. The underweight positions in Chile and Colombia remain, given sub-par growth in Chile and fiscal headwinds expected in Colombia. For Chile and Colombia the commodity cycle has not yet improved enough to get growth moving in a meaningful way.

Off-benchmark Argentina also continues with its gradual normalisation program. We continue to monitor Argentina’s political climate and reform process as we look for potential catalysts for further investments. Inflation is trending downwards from the current high levels; a continuation of this trend is key for this economy to do well going forward. Finally, there is the potential for Argentina to be considered by MSCI for inclusion in Emerging Markets indices within the next year.

Will Landers
BlackRock Investment Management (UK) Limited

9 September 2016

 (1) A Fibra is an investment under Mexican law dedicated to the acquisition and development of real estate assets in Mexico intended for leasing.

GEOGRAPHIC AND SECTOR ALLOCATIONS
as at 30 June 2016

GEOGRAPHIC WEIGHTING VS MSCI EM LATIN AMERICA INDEX

Company MSCI EM Latin America Index
Brazil 56.4 53.8
Mexico 31.1 30.5
Peru 6.0 3.0
Chile 2.6 9.1
Argentina 2.4 0.0
Colombia 1.5 3.6

Sources: BlackRock and MSCI

SECTOR ALLOCATION VS MSCI EM LATIN AMERICA INDEX

Company MSCI EM Latin America Index
Financials 30.5 30.8
Consumer Staples 24.3 21.3
Materials 10.5 12.2
Industrials 8.3 6.7
Energy 8.0 7.5
Consumer Discretionary 6.7 6.5
Telecommunication Services 4.2 5.6
Information Technology 4.1 2.4
Utilities 3.3 6.5
Health Care 0.1 0.5

Sources: BlackRock and MSCI

TEN LARGEST INVESTMENTS
as at 30 June 2016

Itaú Unibanco: 8.3% (2015: 6.1%) is Brazil’s largest private sector bank. We continue to prefer private sector banks over government controlled banks. We remain positive about the prospects for Brazilian banks given the change in political and economic direction by Brazil’s new administration.

AmBev: 7.4% (2015: 5.5%) is Brazil’s leading beverages company with operations throughout the Americas. The company is well positioned to continue to benefit from its defensive position as the region’s largest consumer staples producer, while maintaining a strong focus on preserving operating cost discipline throughout its operations, a perennial AmBev management strength.

Banco Bradesco: 6.7% (2015: 3.9%) is Brazil’s second largest private sector bank. Like Itaú Unibanco, we prefer private sector banks over government controlled banks. We remain positive about the prospects for Brazilian banks given the change in political and economic direction by the new administration.

Femsa: 4.8% (2015: 6.7%) is the Mexican holding company that provides an investment vehicle to Mexico’s domestic retail market via its controlling interest in Coca-Cola’s largest independent bottler, Coca-Cola Femsa, with operations throughout Latin America and Mexico’s fastest growing retailing chain, Oxxo, which has over 10,000 convenience stores throughout Mexico. This is one of our favourite consumer plays in Mexico.

Petrobrás: 4.4% (2015: 2.0%) is Brazil’s vertically integrated oil company. The company is one of the largest beneficiaries of changes in Brazil’s government and the appreciation of the real, given much needed changes in strategic direction and the make-up of its balance sheet.

Cielo: 4.0% (2015: 2.3%) is Brazil’s largest credit card acquirer. We are positive about the company due to its defensive nature in a continuing weak Brazilian economy.

Groupo Financiero Banorte: 3.7% (2015: 5.1%) is Mexico’s leading state-owned bank and is expected to continue to benefit from growing strength in the domestic economy and growth in lending activity.

Telefonica Brasil: 3.2% (2015: 2.2%) is Brazil’s largest telecommunications provider. We are positive about the company given its strong competitive position and potential regulatory changes.

Credicorp: 3.0% (2015: 3.0%) is Peru’s leading financial institution. The company should continue to benefit from being the leader in one of the fastest growing economies in the region, fuelled by the recent market-friendly presidential election results.

Grupo Mexico: 2.9% (2015: 2.3%) is a Mexican holding company whose principal asset is Peruvian miner, Southern Copper. We hold the stock as a way to gain exposure to Southern Copper at a discount.

All percentages reflect the value of the holding as a percentage of total investments. Percentages in brackets represent the value of the holding at 31 December 2015. Together, the ten largest investments represents 48.4% of total investments (ten largest Investments at 31 December 2015: 46.2%).

INVESTMENTS
30 June 2016

Country of operation  Market value 
US$’000 
% of 
investments 
Brazil
Itaú Unibanco – ADR 18,388  8.3
Itaú Unibanco – options (59)
AmBev – ADR 15,839  7.4
Ambev 481 
Ambev – options (1)
Banco Bradesco – ADR 14,820  6.7
Banco Bradesco – options (64)
Petrobrás 7,989  4.4
Petrobrás – ADR 1,787 
Cielo 9,022  4.0
Cielo – options (73)
Telefonica Brasil – preference shares 4,720  3.2
Telefonica Brasil – ADR 2,516 
Telefonica Brasil – options (73)
Ultrapar Participaçóes 5,873  2.7
Ultrapar Participaçóes – option (7)
BM&F Bovespa 5,502  2.5
BM&F Bovespa – options (65)
BRF – ADR 4,385  2.0
CCR 4,264  1.9
CCR – options (51)
Raia Drogasil 3,725  1.7
Raia Drogasil – options (61)
BB Seguridade Participaçóes 3,508  1.6
BB Seguridade Participaçóes – options (22)
Klabin 1,389  1.4
Klabin 8% 08/01/19 convertible bond† 1,145 
Klabin 2.5% 15/06/22 convertible bond† 247 
Klabin 7.25% 15/06/20 convertible bond† 247 
Klabin warrants* – 
Rumo Logistica Operadora Multimodal  2,907  1.3
Kroton Educacional 2,757  1.2
Kroton Educacional – option (33)
Arezzo Industria e Comercio 1,875  0.8
Arezzo Industria e Comercio - options (22)
Lojas Renner 1,849  0.8
Lojas Renner - options (17)
TAESA 1,624  0.7
TAESA - option (5)
Sao Martinho 1,340  0.6
Sao Martinho - options (12)
Iguatemi Empresa 1,333  0.6
Iguatemi Empresa - options (11)
Fibria Celulose 665  0.6
Fibria Celulose - ADR 574 
Iochpe-Maxion 1,176  0.5
Iochpe-Maxion - options (8)
WEG 1,158  0.5
WEG - option – 
Minerva 1,101  0.5
Valid Solucoes e Servicos de Seguranca 750  0.3
OdontoPrev warrants* 249  0.1
Hypermarcas 11.3% 15/10/18 convertible bond† 124  0.1
Lupatech 6.5% 15/04/18 convertible bond†        24  0.0
 --------   -------- 
 124,769  56.4
 --------   -------- 
Mexico
Femsa 10,638  4.8
Femsa - options (3)
Grupo Financiero Banorte 8,308  3.7
Grupo Financiero Banorte – options (68)
Grupo Mexico 6,444  2.9
Grupo Mexico – options (40)
Walmart de Mexico 6,230  2.8
Walmart de Mexico – options (27)
Cemex SAB – ADR 6,006  2.7
Cemex SAB – option (5)
Grupo Televisa - ADR 4,214  1.9
Arca Continental 3,200  1.4
Arca Continental - options (30)
Grupo Bimbo 3,102  1.4
Grupo Bimbo - options (21)
Alfa 2,978  1.4
Alfa - options (8)
Corporacion Inmobiliaria Vesta 2,467  1.1
Corporacion Inmobiliaria Vesta - options (13)
Fibra Uno Administracion 2,425  1.1
Fibra Uno Administracion - options (1)
América Móvil - ADR 2,144  1.0
Infraestructura Energetica 2,026  0.9
Infraestructura Energetica - options (6)
Administradora Industrial 1,872  0.8
Administradora Industrial - options (3)
Controladora Vuela Compania de Aviacion - ADR 1,738  0.8
Grupo Aeroportuario del Pacifico 1,476  0.7
Grupo Aeroportuario del Pacifico - options (10)
Alsea 1,339  0.6
Alsea – options (1)
Grupo Sanborns 1,075  0.5
Grupo Sanborns - options (4)
Grupo GICSA 818  0.4
Grupo GICSA - option
Grupo Aeroportuario del Centro Norte 555  0.2
Grupo Aeroportuario del Centro Norte – option (4)
 --------   -------- 
68,811  31.1
 --------   -------- 
Peru
Credicorp 6,727  3.0
Credicorp – options (30)
Southern Copper 2,698  1.2
Minas Buenaventura – ADR 2,567  1.2
Minas Buenaventura – options (16)
Grana y Montero – ADR 693  0.6
Grana y Montero 638 
 --------   -------- 
13,277  6.0
 --------   -------- 
Chile
Itau Corpbanca 1,898  0.9
S.A.C.I Falabella 1,659  0.7
Empresa Nacional de Electricidad 758  0.7
Empresa Nacional de Electricidad – ADR 740 
Endesa Americas 376  0.3
Endesa Americas - ADR 365 
 --------   -------- 
5,796  2.6
 --------   -------- 
Argentina
YPF – ADR 2,050  0.9
YPF – option (1)
Adecoagro 1,861  0.8
Pampa Energia 1,503  0.7
 --------   -------- 
 5,413  2.4
 --------   -------- 
Colombia
Grupo Nutresa 1,891  0.9
Cemex Latam 1,254  0.6
 --------   -------- 
 3,145  1.5
 --------   -------- 
Total Investments  221,211  100.0
 --------   -------- 
Represented as follows:
Investments held at fair value through profit and loss  222,086  100.4
Derivative financial instruments – written call options (875) (0.4)
 --------   -------- 
Total  221,211   100.0
 --------   -------- 
† Unquoted securities.
*  Outperformance warrants held are linked to the underlying listed securities which have available quoted prices, however, the warrants are not listed in their own right. The valuation of outperformance warrants has been derived from the quoted prices of underlying securities.

The negative valuations of US$875,000 (31 December 2015: US$227,000) in respect of options held represent the notional cost of repurchasing the contracts at market prices as at 30 June 2016.

The total number of investments (excluding call options and outperformance warrants) held at 30 June 2016 was 70 (31 December 2015: 65). At 30 June 2016, the Company did not hold any equity interests comprising more than 3% of any company’s share capital.

All investments are in equity shares unless otherwise stated.

INCOME STATEMENT
for the six months ended 30 June 2016






Notes 
Revenue US$’000 
Six months 
ended  30.06.16 
(unaudited) 
Revenue US$’000
Six months 
ended  30.06.15 
(unaudited) 
Revenue US$’000 Year 
ended 
31.12.15 
(audited) 
Capital US$’000 
Six months 
ended  30.06.16 
(unaudited) 
Capital US$’000 Six months 
ended  30.06.15 
(unaudited) 
Capital US$’000 
Year 
ended 
31.12.15 
(audited) 
Total US$’000 
Six months 
ended  30.06.16 
(unaudited) 
Total US$’000 
Six months 
ended  30.06.15 
(unaudited) 
Total
US$’000 
Year 
ended 
31.12.15 
(audited) 
Gains/(losses) on investments held at fair value through profit or loss –  –  –  38,132  (28,532) (91,431) 38,132  (28,532) (91,431)
Losses on foreign exchange –  –  –  (79) (637) (590) (79) (637) (590)
Income from investments held at fair value through profit or loss 2,893  4,887  8,425  –  –  –  2,893  4,887  8,425 
Other income 2,127  1,671  3,301  –  –  –  2,127  1,671  3,301 
    ------   ------   ------   ------   ------   ------   ------   -------   ------- 
Total income 5,020  6,558  11,726  38,053  (29,169) (92,021) 43,073  (22,611) (80,295)
    ------   ------   ------   ------   ------   ------   ------   -------   ------- 
Expenses
Investment management and performance fees (223) (257) (455) (671) (773) (1,365) (894) (1,030) (1,820)
Operating expenses (340) (489) (786) (22) (27) (45) (362) (516) (831)
    ------   ------   ------   ------   ------   ------   ------   -------   ------- 
Total operating expenses (563) (746) (1,241) (693) (800) (1,410) (1,256) (1,546) (2,651)
    ------   ------   ------   ------   ------   ------   ------   -------   ------- 
Net profit/(loss) on ordinary activities before finance costs and taxation 4,457  5,812  10,485  37,360  (29,969) (93,431) 41,817  (24,157) (82,946)
Finance costs (2) (2) (3) (5) (6) (8) (7) (8) (11)
    ------   ------   ------   ------   ------   ------   ------   -------   ------- 
Net profit/(loss) on ordinary activities before taxation 4,455  5,810  10,482  37,355  (29,975) (93,439) 41,810  (24,165) (82,957)
Taxation (579) (509) (993) 135  159  280  (444) (350) (713)
    ------   ------   ------   ------   ------   ------   ------   -------   ------- 
Net profit/(loss) on ordinary activities after taxation 3,876  5,301  9,489  37,490  (29,816) (93,159) 41,366  (24,515) (83,670)
    ------   ------   ------   ------   ------   ------   ------   -------   ------- 
Earnings/(loss) per ordinary share (US$ cents) 9.85  13.46  24.10  95.22  (75.73) (236.63) 105.07  (62.27) (212.53)
    ======   ======   ======   ======   ======  ======   ======   ======   ====== 

The total column of this statement represents the Company’s Profit and Loss account. The supplementary revenue and capital columns are both prepared under guidance published by the Association of Investment Companies (AIC). All items in the above statement derive from continuing operations and no operations were acquired or discontinued during the period. All income is attributable to the equity holders of BlackRock Latin American Investment Trust plc.

The Company does not have any other recognised gains or losses. The net profit/(loss) for the period disclosed above represents the Company’s total comprehensive income.

STATEMENT OF CHANGES IN EQUITY
for the six months ended 30 June 2016

Called up 
share 
capital 
US$’000 
Share 
premium 
account 
US$’000 
Capital 
redemption 
reserve 
US$’000 
Non- 
distributable 
reserve 
US$’000 

Capital 
reserves 
US$’000 

Revenue 
reserve 
US$’000 


Total 
US$’000 
For the six months ended 30 June 2016 (unaudited)
At 31 December 2015 4,144  11,719  4,843  4,356  143,028  12,853  180,943 
Total comprehensive income:
Profit for the period –  –  –  –  37,490  3,876  41,366 
Transaction with owners, recorded directly to equity:
Dividends paid(1) –  –  –  –  –  (2,362) (2,362)
 ------   ------   ------   ------   ------   ------   ------ 
At 30 June 2016 4,144  11,719  4,843  4,356  180,518  14,367  219,947 
 ------   ------   ------   ------   ------   ------   ------ 
For the six months ended 30 June 2015 (unaudited)
At 31 December 2014 4,144  11,719  4,843  4,356  236,187  15,174  276,423 
Total comprehensive income:
(Loss)/profit for the period –  –  –  –  (29,816) 5,301  (24,515)
Transaction with owners, recorded directly to equity:
Dividends paid(2) –  –  –  –  –  (5,905) (5,905)
 ------   ------   ------   ------   ------   ------   ------ 
At 30 June 2015 4,144  11,719  4,843  4,356  206,371  14,570  246,003 
 ------   ------   ------   ------   ------   ------   ------ 
For the year ended 31 December 2015 (audited)
At 31 December 2014 4,144  11,719  4,843  4,356  236,187  15,174  276,423 
Total comprehensive income:
(Loss)/profit for the year –  –  –  –  (93,159) 9,489  (83,670)
Transaction with owners, recorded directly to equity:
Dividends paid(3) –  –  –  –  –  (11,810) (11,810)
 ------   ------   ------   ------   ------   ------   ------ 
At 31 December 2015 4,144  11,719  4,843  4,356  143,028  12,853  180,943 
 ======   ======   ======   ======   ======   ======   ====== 

1.   Final dividend in respect of the year ended 31 December 2015 of 6.00 cents per share declared on 8 March 2016 and paid on 9 May 2016.
2.   Final dividend in respect of the year ended 31 December 2014 of 15.00 cents per share declared on 24 February 2015 and paid on 6 May 2015.
3.   Final dividend paid in respect of the year ended 31 December 2014 of 15.00 cents per share declared on 24 February 2015 and paid on 6 May 2015
      and the interim dividend for the year ended 31 December 2015 of 15.00 cents per share declared on 18 August 2015 and paid on 7 October 2015.

The transaction costs incurred on the acquisition and disposal of investments are included within the capital reserves and amounted to US$302,000 for the six months ended 30 June 2016 (period ended 30 June 2015: US$170,000; year ended 31 December 2015: US$322,000).

BALANCE SHEET
as at 30 June 2016



Notes 
30 June 2016 
US$’000 
(unaudited) 
30 June 2015 
US$’000 
(unaudited) 
31 December 2015 
US$’000 
(audited) 
Fixed assets
Investments held at fair value through profit or loss 222,086  245,070  178,126 
    --------   --------   -------- 
Current assets
Debtors 3,119  2,224  1,277 
Cash and cash equivalents 70  3,392  2,981 
Collateral pledged with brokers 1,355  989  703 
    --------   --------   -------- 
4,544  6,605  4,961 
    --------   --------   -------- 
Creditors – amounts falling due within one year
Bank overdraft (3,545) (1,355) – 
Derivative financial instruments (875) (506) (227)
Other creditors (2,012) (3,560) (1,665)
    --------   --------   -------- 
(6,432) (5,421) (1,892)
    --------   --------   -------- 
Net current (liabilities)/assets (1,888) 1,184  3,069 
    --------   --------   -------- 
Total assets less current liabilities 220,198  246,254  181,195 
    --------   --------   -------- 
Creditors – amounts falling due after more than one year
Deferred taxation (227) (227) (228)
Non equity redeemable shares (24) (24) (24)
    --------   --------   -------- 
(251) (251) (252)
    --------   --------   -------- 
Net assets 219,947  246,003  180,943 
    --------   --------   -------- 
Capital and reserves
Called up share capital 4,144  4,144  4,144 
Share premium account 11,719  11,719  11,719 
Capital redemption reserve 4,843  4,843  4,843 
Non-distributable reserve 4,356  4,356  4,356 
Capital reserves 180,518  206,371  143,028 
Revenue reserve 14,367  14,570  12,853 
    --------   --------   -------- 
Total shareholders’ funds 219,947  246,003  180,943 
    --------   --------   -------- 
Net asset value per ordinary share (US$ cents) 558.67  624.85  459.60 
    ======   ======   ====== 

STATEMENT OF CASH FLOWS
for the six months ended 30 June 2016

Six months ended 
30 June 2016 
US$’000 
(unaudited) 
Six months ended 
30 June 2015 
US$’000 
(unaudited) 
Year ended 
31 December 2015 
US$’000 
(audited) 
Operating activities
Profit/(loss) before taxation 41,810  (24,165) (82,957)
Add back finance costs 11 
(Gains)/losses on investments held at fair value through profit or loss (38,132) 28,532  91,431 
Net movement on foreign exchange 79  637  590 
Sales of investments held at fair value through profit or loss 48,673  47,835  82,230 
Purchases of investments held at fair value through profit or loss (56,053) (47,638) (77,437)
Decrease in debtors 357  334  44 
Increase/(decrease) in other creditors 347  (312) (707)
Net movement in collateral pledged with brokers (652) 781  (26)
Taxation on investment income (444) (352) (714)
 -------   -------  ------- 
Net cash (used)/generated from operating activities (4,008) 5,660  12,465 
 -------   -------  ------- 
Financing activities
Interest paid (7) (8) (11)
Dividends paid (2,362) (5,905) (11,810)
 -------   -------  ------- 
Net cash used in financing activities (2,369) (5,913) (11,821)
 -------   -------  ------- 
(Decrease)/increase in cash and cash equivalents (6,377) (253) 644 
 -------   -------  ------- 
Cash and cash equivalents at the start of the period 2,981  2,927  2,927 
Effect of foreign exchange rate changes (79) (637) (590)
 -------   -------  ------- 
Cash and cash equivalents at end of period (3,475) 2,037  2,981 
 -------   -------  ------- 
Comprised of:
Cash at bank 70  3,392  2,981 
Bank overdraft (3,545) (1,355) – 
 -------   -------  ------- 
(3,475) 2,037  2,981 
 ======   =====   ===== 

NOTES TO THE FINANCIAL STATEMENTS
for the six months ended 30 June 2016

1. PRINCIPAL ACTIVITY AND BASIS OF PREPARATION

The Company conducts its business so as to qualify as an investment trust company within the meaning of sub-sections 1158-1165 of the Corporation Tax Act 2010.

The Company presents its results and positions under FRS 102, ‘The Financial Reporting Standard applicable in the UK and Republic of Ireland’ (FRS 102), which forms part of revised Generally Accepted Accounting Practice (New UK GAAP) issued by the Financial Reporting Council (FRC) in 2013.

The condensed set of financial statements has been prepared on a going concern basis in accordance with FRS 102 and ‘Interim Financial Reporting’ (FRS 104) issued by the FRC in March 2015 and the revised Statement of Recommended Practice – ‘Financial Statements of Investment Trust Companies and Venture Capital Trusts’ (SORP) issued by the Association of Investment Companies (AIC) in November 2014.

The accounting policies applied for the condensed set of financial statements with regard to measurement and classification are as set out in the Company’s Annual Report and Financial Statements for the year ended 31 December 2015. This reflects the Company’s application of Sections 11 and 12 of FRS 102, in relation to financial instruments, in full.

2. INCOME

Six months ended 
30 June 2016 
US$’000 
(unaudited) 
Six months ended 
30 June 2015 
US$’000 
(unaudited) 
Year ended 
31 December 2015 
US$’000 
(audited) 
Investment income:
Overseas dividends 2,213  3,060  5,784 
REIT distributions 156  239  442 
Special dividends 118  413  598 
Stock dividends 372  1,337  1,337 
Outperformance warrants (108) (88)
Interest income 109  14  434 
Amortisation of fixed interest investments (83) (68) (82)
 ------   ------   ------ 
2,893  4,887  8,425 
 ------   ------   ------ 
Other income:
Traded option premiums 2,127  1,671  3,300 
Deposit interest –  – 
 ------   ------   ------ 
Total 5,020  6,558  11,726 
 =====   =====   ===== 

Special dividends of US$7,000 have been recognised in capital (six months ended 30 June 2015: nil; year ended 31 December 2015: US$100,000).

During the period, the Company received premiums totalling US$2,425,000 (six months ended 30 June 2015: US$1,798,000; year ended 31 December 2015: US$3,279,000) for writing put and covered call options for the purposes of revenue generation, of which US$2,127,000 (six months ended 30 June 2015: US$1,671,000; year ended 31 December 2015: US$3,300,000) was taken to income. All derivative transactions were based on constituent stocks in MSCI EM Latin America Index. At 30 June 2016, there were 78 open option positions with an associated liability of US$875,000 (six months ended 30 June 2015: 62 open option positions with an associated liabilty of US$506,000; year ended 31 December 2015: 45 open option positions with an associated liability of US$227,000).

The Company also participated in outperformance warrants contracts in 4 securities during the period (six months ended 30 June 2015: 6 securities; year ended 31 December 2015: 3 securities) which generated income of US$8,000 (six months ended 30 June 2015: loss of US$108,000; year ended 31 December 2015: loss of US$88,000).

3. INVESTMENT MANAGEMENT AND PERFORMANCE FEES

The investment management fee has been calculated at 0.85% per annum of the net asset value. The Manager is also entitled to a performance fee equal to 10% of any outperformance of the net asset value per share against the benchmark, the MSCI EM Latin America Index (in US dollar terms on a total return basis) plus a hurdle of 1%. The performance fee is capped at 1% of net asset value.

No performance fee was payable in respect of the six months ended 30 June 2016, six months ended 30 June 2015 or the year ended 31 December 2015.

The total fee currently payable to BlackRock in any twelve month period is limited to 4.99% of the net asset value. However, as BlackRock is only entitled to a basic fee of 0.85% of the net asset value and the performance fee is capped at 1.0% of the net asset value, the amount paid to BlackRock by the Company in respect of fees in any twelve month period is expected to be substantially lower than 4.99% of the net asset value.

Following discussions with the Manager, agreement has been reached on a revised management fee basis. The management fee will be reduced with effect from 1 January 2017 from 0.85% per annum to 0.80% per annum of the Company’s net asset value. In addition, the performance fee will be removed.

Six months ended 
30 June 2016 
US$’000 
(unaudited) 
Six months ended 
30 June 2015 
US$’000 
(unaudited) 
Year ended 
31 December 2015 
US$’000 
(audited) 
Revenue:
Investment management fee (25%) 223  257  455 
 -----   -----   ----- 
Capital:
Investment management fee (75%) 671  773  1,365 
 -----   -----   ----- 
Total 894  1,030  1,820 
 ====   =====   ===== 

4. OPERATING EXPENSES

Six months ended 
30 June 2016 
US$’000 
(unaudited) 
Six months ended 
30 June 2015 
US$’000 
(unaudited) 
Year ended 
31 December 2015 
US$’000 
(audited) 
Custody fee 25  34  58 
Depositary fees 11  15  27 
Audit fee 21  25  45 
Registrar’s fees 22  24  44 
Directors’ emoluments – fees for services to the Company* 106  137  242 
Marketing fees** (27) 99  94 
Other administration costs 182  155  276 
 -----   -----   ----- 
340  489  786 
 -----   -----   ----- 
Transaction charges – capital 22  27  45 
 -----   -----   ----- 
362  516  831 
 ====   =====   ===== 

*     Directors’ fees and audit fees are paid in sterling and are therefore subject to exchange rate fluctuations.
**    The marketing fees at 30 June 2016 include marketing expenses of US$46,000 in respect of 2016 and the write-back of 2015 marketing expenses of US$73,000.

5. DIVIDENDS

In accordance with FRS102 Section 32 ‘Events After the End of the Reporting Period’, the final dividend payable on ordinary shares is recognised as a liability when approved by shareholders. Interim dividends are recognised only when paid.

The Board has declared an interim dividend of 6.00 cents (2015: 15.00 cents) payable on 28 October 2016 to shareholders on the register as at 23 September 2016. The total cost of this dividend, based on 39,369,620 ordinary shares in issue at 9 September 2016 is US$2,362,000 (30 June 2015: 39,369,620 shares and total cost of US$5,905,000).

6. CREDITORS - AMOUNT FALLING DUE AFTER MORE THAN ONE YEAR

Six months ended 
30 June 2016 
US$’000 
(unaudited) 
Six months ended 
30 June 2015 
US$’000 
(unaudited) 
Year ended 
31 December 2015 
US$’000 
(audited) 
Deferred tax liability 227  227  228 
Non equity redeemable shares 24  24  24 
 -----   -----   ----- 
251  251  252 
 ====   ====   ==== 

Non equity redeemable shares

The redeemable shares of £1 each carry the right to receive a fixed dividend at the rate of 0.1% per annum on the nominal amount thereof. They are capable of being redeemed by the Company at any time and confer no rights to receive notice of, attend or vote at general meetings except where the rights of holders are to be varied or abrogated. On a winding up, the capital paid up on such shares ranks pari passu with, and in proportion to, any amounts of capital paid to the holders of ordinary shares, but does not confer any further right to participate in the surplus assets of the Company.

7. CALLED UP SHARE CAPITAL

Ordinary 
shares 
number 
Treasury 
shares 
number 
Total 
shares 
number 
Nominal 
value 
US$’000 
Allotted, called up and fully paid share capital comprised:
Ordinary shares of 10 cents each
 --------   --------   --------   -------- 
At 1 January 2016 39,369,620  2,071,662  41,441,282  4,144 
 --------   --------   --------   -------- 
At 30 June 2016 39,369,620  2,071,662  41,441,282  4,144 
 ========   ========   ========   ======== 

There has been no change in share capital in the six months to 30 June 2016 or up to the date of this report.

8. RETURN AND NET ASSET VALUE PER ORDINARY SHARE

Total revenue and capital returns and net asset value per share are shown below and have been calculated using the following:

30 June 2016 
(unaudited) 
30 June 2015 
(unaudited) 
31 December 2015 
(audited) 
Net revenue profit attributable to ordinary shareholders (US$’000) 3,876  5,301  9,489 
 --------   --------   -------- 
Net capital profit/(losses) attributable to ordinary shareholders (US$’000) 37,490  (29,816) (93,159)
 --------   --------   -------- 
Total profit/(losses) attributable to ordinary shareholders (US$’000) 41,366  (24,515) (83,670)
 --------   --------   -------- 
Equity shareholders’ funds (US$’000) 219,947  246,003  180,943 
 --------   --------   -------- 
The weighted average number of ordinary shares in issue during the period on which the basic return per ordinary share was calculated was: 39,369,620  39,369,620  39,369,620 
 --------   --------   -------- 
The actual number of ordinary shares in issue at the end of each period on which the undiluted net asset value was calculated was: 39,369,620  39,369,620  39,369,620 
 --------   --------   -------- 
Revenue earnings per share (cents) 9.85  13.46  24.10 
 --------   --------   -------- 
Capital earnings per share (cents) 95.22  (75.73) (236.63)
 --------   --------   -------- 
Total earnings per share (cents) 105.07  (62.27) (212.53)
 ========   ========   ======== 
As at 
30 June 2016 
(unaudited) 
As at 
30 June 2015 
(unaudited) 
As at 
31 December 2015 
(audited) 
Net asset value per share (cents) 558.67  624.85  459.60 
 --------   --------   -------- 
Ordinary share price (mid-market) (cents)* 480.54  542.62  408.24 
 --------   --------   -------- 

* The Company’s share price is quoted in sterling and the above represents the US dollar equivalent based on exchange rates of 1.3367 (30 June 2015: 1.5728; 31 December 2015: 1.4738).

Basic and diluted earnings per share and net asset value per share are the same as the Company does not have any dilutive securities outstanding.

9. VALUATION OF FINANCIAL INSTRUMENTS

The Company has early adopted the amendments to FRS 102 ‘Fair value hierarchy disclosure’ effective for annual periods beginning on or after 1 January 2017. These amendments improve the consistency of fair value disclosure for financial instruments compared with those required by EU adopted IFRS.

The Company classifies financial instruments measured at fair value using a fair value hierarchy. The fair value hierarchy has the following categories:

Level 1 – Quoted prices for identical instruments in active markets

A financial instrument is regarded as quoted in an active market if quoted prices are readily and regularly available and those prices represent actual and regularly occurring market transactions on an arm’s length basis. The Company does not adjust the quoted price for these instruments.

Level 2 – Valuation techniques using observable inputs

This category includes instruments valued using: quoted prices in active markets for similar instruments; quoted prices for similar instruments in markets that are considered less than active; or other valuation techniques where all significant inputs are directly or indirectly observable from market data.

Level 3 – Valuation techniques using significant unobservable inputs

This category includes all instruments where the valuation techniques used include inputs not based on market data and these inputs could have a significant impact on the instrument’s valuation. This category also includes instruments that are valued based on quoted prices for similar instruments where significant unobservable adjustments or assumptions are required to reflect differences between the instruments and instruments for which there is no active market. The level in the fair value hierarchy within which the fair value measurement is categorised in its entirety is determined on the basis of the lowest level input that is significant to the fair value measurement in its entirety.

For this purpose, the significance of an input is assessed against the fair value measurement in its entirety. If a fair value measurement uses observable inputs that require significant adjustment based on unobservable inputs, that measurement is a Level 3 measurement.

Assessing the significance of a particular input to the fair value measurement in its entirety requires judgment, considering factors specific to the asset or liability.

The determination of what constitutes ‘observable’ inputs requires significant judgement by the Investment Manager. The Investment Manager considers observable inputs to be that market data that is readily available, regularly distributed or updated, reliable and verifiable, not proprietary, and provided by independent sources that are actively involved in the relevant market.

The table below is an analysis of the Company’s financial instruments measured at fair value at the balance sheet date.

Financial assets at fair value through profit or loss as at 30 June 2016 Level 1 
US$’000 
Level 2 
US$’000 
Level 3 
US$’000 
Total 
US$’000 
Equity investments (including outperformance warrants) 220,299 220,299
Derivative instruments – call options (875) (875)
Fixed interest investments 518 1,269 1,787
 -------   -----   -----   ------- 
Total 220,299 (357) 1,269 221,211
 ======   =====   ====   ====== 

   

Financial assets at fair value through profit or loss as at 30 June 2015 Level 1 
US$’000 
Level 2 
US$’000 
Level 3 
US$’000 
Total 
US$’000 
Equity investments (including outperformance warrants) 242,417 242,417
Derivative instruments – call options (506) (506)
Fixed interest investments 588 657 1,408 2,653
 -------   -----   -----   ------- 
Total 243,005 151 1,408 244,564
 ======   =====   ====   ====== 

   

Financial assets at fair value through profit or loss as at 31 December 2015 Level 1 
US$’000 
Level 2 
US$’000 
Level 3 
US$’000 
Total 
US$’000 
Equity investments (including outperformance warrants) 176,095 176,095
Derivative instruments – call options (227) (227)
Fixed interest investments 121 622 1,288 2,031
 -------   -----   -----   ------- 
Total 176,216 395 1,288 177,899
 ======   =====   ====   ====== 

A reconciliation of fair value measurement in Level 3 is set out below.

Level 3 Financial assets at fair value through profit or loss Six months ended 
30 June 2016 
US$’000 
(unaudited)
Six months ended 
30 June 2015 
US$’000 
(unaudited)
Year ended 
31 December 2015 
US$’000 
(audited)
Opening fair value 1,288  1,646  1,646 
Transfer from Level 1 to Level 3 121  –  – 
Total gains or losses included in gains/(losses) on investments in the Income Statement:
– assets held at the end of the period (140) (238) (358)
 ------   -----   ----- 
Closing balance 1,269  1,408  1,288 
 =====   =====   ==== 

The Level 3 investments in the table above relate to the Klabin 8% 08/01/19 convertible bond and Hypermarcas 11.3% 15/10/18 convertible bond. The Klabin bond is valued in line with the BOVESPA and converted to unit pricing. The Hypermarcas bond was transferred from Level 1 to Level 3 during the period as the website-based pricing methodology was re-assessed as 'unobservable' and was recorded at fair value as at 30 June 2016 (30 June 2015 and 31 December 2015: no transfers). The Company held two Level 3 securities as at 30 June 2016 and one Level 3 security as at 30 June 2015 and 31 December 2015.

For exchange listed equity investments the quoted price is the bid price. Written options have been valued based on market observable inputs represented by the underlying quoted securities to which these contracts expose the Company.

The unquoted fixed asset investments, as shown in Level 3 have been valued based on the Directors’ best estimate based on latest information in line with the principles of the International Private and Venture Capital Valuation Guidelines.

10. TRANSACTIONS WITH THE AIFM AND THE INVESTMENT MANAGER

BlackRock Fund Managers Limited (BFM) was appointed as the Company’s AIFM with effect from 2 July 2014. BFM has (with the Company’s consent) delegated certain portfolio and risk management services, and other ancillary services, to BlackRock Investment Management (UK) Limited (BIM (UK)). Further details of the investment management contract are disclosed in note 3.

The investment management fee for the six months ended 30 June 2016 amounted to US$894,000 (six months ended 30 June 2015: US$1,030,000; year ended 31 December 2015: US$1,820,000). No performance fee was payable for the six months ended 30 June 2016 or the six months ended 30 June 2015 or the year ended 31 December 2015.

At the period end, a total amount of US$899,000 was outstanding in respect of these fees (six months ended 30 June 2015: US$1,036,000; year ended 31 December 2015: US$794,000).

In addition to the above services, BIM (UK) has provided the Company with marketing services. The total fees written back after payment for these services for the period ended 30 June 2016 amounted to US$27,000 excluding VAT (six months ended 30 June 2015: fees paid/payable of US$99,000; year ended 31 December 2015: fees paid/payable of US$94,000) of which US$155,000 was outstanding at 30 June 2016 (30 June 2015: US$355,000; 31 December 2015: US$183,000).

11. RELATED PARTY DISCLOSURE

The Board consists of six non-executive Directors, all of whom are considered to be independent by the Board. None of the Directors has a service contract with the Company. The Chairman receives an annual fee of £45,000, the Chairman of the Audit Committee/Senior Independent Director receives an annual fee of £34,000 and each of the other Directors receives an annual fee of £30,000.

At the period end and as at the date of this report members of the Board held ordinary shares in the Company as set out below:

9 September 2016 
Ordinary shares 
30 June 2016 
Ordinary shares 
Peter Burnell (Chairman) 3,000  3,000 
Mahrukh Doctor 675  675 
Carolan Dobson –  – 
Antonio Monteiro de Castro 47,000  47,000 
Michael St Aldwyn 1,470  1,470 
Laurence Whitehead 15,203  15,203 

12. CONTINGENT LIABILITIES

There were no contingent liabilities at 30 June 2016, 30 June 2015 or 31 December 2015.

13. PUBLICATION OF NON STATUTORY ACCOUNTS

The financial information contained in this half yearly report does not constitute statutory accounts as defined in section 435 of the Companies Act 2006. The financial information for the six months ended 30 June 2016 and 30 June 2015 has not been audited or reviewed by the Auditors.

The information for the year ended 31 December 2015 has been extracted from the latest published audited financial statements, which have been filed with the Registrar of Companies, unless otherwise stated. The report of the Auditors in those financial statements contained no qualification or statement under sections 498(2) or (3) of the Companies Act 2006.

14. ANNUAL RESULTS

The Board expects to announce the annual results for the year ending 31 December 2016 as prepared under UK GAAP in March 2017. Copies of the results announcement can be obtained from the Secretary on 020 7743 3000. The Annual Report and Financial Statements should be available by mid-March 2017, with the Annual General Meeting being held in the second quarter of 2017.

For further information, please contact:

Simon White, Managing Director, Investment Trusts, BlackRock Investment Management (UK) Limited

Tel: 020 7743 5284

Peter Burnell – Chairman

Tel: 01434 632292

Press enquiries:

Lucy Horne, Lansons Communications – Tel:  020 7294 3689

E-mail:  [email protected]

9 September 2016

12 Throgmorton Avenue

London EC2N 2DL

END

The Half Yearly Financial Report will also be available on the BlackRock Investment Management website at http://www.blackrock.co.uk/brla.  Neither the contents of the Manager’s website nor the contents of any website accessible from hyperlinks on the Manager’s website (or any other website) is incorporated into, or forms part of, this announcement.

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